Critical Contrast: Standard Lithium (NYSE:SLI) and Gulf Resources (NASDAQ:GURE)

Gulf Resources (NASDAQ:GURE) and Standard Lithium (NYSE:SLI) are both small-cap basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, risk, valuation, profitability and institutional ownership.

Analyst Ratings

This is a summary of current ratings and recommmendations for Gulf Resources and Standard Lithium, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gulf Resources	0	0	0	0	0.00
Standard Lithium	0	0	2	0	3.00

Standard Lithium has a consensus price target of $3.95, indicating a potential upside of 158.17%. Given Standard Lithium’s stronger consensus rating and higher possible upside, analysts plainly believe Standard Lithium is more favorable than Gulf Resources.

Profitability

This table compares Gulf Resources and Standard Lithium’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gulf Resources	-776.15%	-53.74%	-47.52%
Standard Lithium	N/A	-11.52%	-10.25%

Valuation & Earnings

This table compares Gulf Resources and Standard Lithium”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gulf Resources	$30.04 million	0.24	-$61.79 million	($9.42)	-0.07
Standard Lithium	N/A	N/A	$108.82 million	$0.59	2.59

Standard Lithium has lower revenue, but higher earnings than Gulf Resources. Gulf Resources is trading at a lower price-to-earnings ratio than Standard Lithium, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Gulf Resources has a beta of 0.19, indicating that its share price is 81% less volatile than the S&P 500. Comparatively, Standard Lithium has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.

Insider & Institutional Ownership

3.3% of Gulf Resources shares are held by institutional investors. Comparatively, 16.8% of Standard Lithium shares are held by institutional investors. 1.7% of Gulf Resources shares are held by insiders. Comparatively, 3.7% of Standard Lithium shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Standard Lithium beats Gulf Resources on 11 of the 12 factors compared between the two stocks.

About Gulf Resources

Gulf Resources, Inc., through its subsidiaries, manufactures and trades bromine and crude salt, chemical products, and natural gas in the People’s Republic of China. The company operates through four segments: Bromine, Crude salt, Chemical products, and Natural gas segments. It also provides bromine for use in bromine compounds, intermediates in organic synthesis, brominated flame retardants, fumigants, water purification compounds, dyes, medicines, and disinfectants. In addition, the company offers crude salt for use as a material in alkali and chlorine alkali production for use in the chemical, food and beverage, and other industries. In addition, it manufactures and sells chemical products for use in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking chemical agents, and inorganic chemicals, as well as materials that are used for human and animal antibiotics. The company is based in Shouguang, the People’s Republic of China.

About Standard Lithium

Standard Lithium Ltd. explores for, develops, and processes lithium brine properties in the United States. Its flagship project is the Lanxess project with area of approximately 150,000 acres located in southern Arkansas. The company was formerly known as Patriot Petroleum Corp. and changed its name to Standard Lithium Ltd. in December 2016. Standard Lithium Ltd. was incorporated in 1998 and is headquartered in Vancouver, Canada.